Financially Stable: A Guide to the Best Wealth Planning Strategies

Did you know that a survey from Bankrate found that 42% of Americans find that money affects their mental health negatively? This isn’t surprising considering that money management isn’t taught in schools, and most of our parents are afraid of or uneducated about finances as well.

If you are looking to take control back, then applying some basic wealth planning strategies is crucial. Read on to find out what these wealth strategies are and how to use them to build your financial future on solid ground.

Diversification

You might have heard of diversification as a wealth planning strategy before, but are you actually utilizing this essential tool in your wealth planning strategy? It’s not only about diversifying the investments you have within your stock portfolio by choosing stocks from diverse industries, tiers, and countries. 

You also have to work on diversifying your investments as a whole. Make sure you are invested in stocks, bonds, real estate, cryptocurrency (be careful with this one), and business. 

Do not put all your eggs in one basket, but also do not fear any particular investment class or favor one class over another. Perhaps you are feeling antsy about putting money into Bitcoin since it’s such a new investment, but it might as well be the wave of the future financial world. So put a bit of your money into it, and see how it goes. 

Insurance

There are so many different kinds of insurance out there that you might feel a bit overwhelmed and end up choosing none. But if you wish to perform proper wealth planning for your children and the generations to come, then buying insurance for yourself and your family is necessary. 

Some insurances to consider are discussed below. Each individual and family is different in the kind of insurance they will need. So consider your specific situation and choose the insurance that will suit you best.

Life Insurance

If you are worried about dying before your spouse or partner and wish to provide for your family financially, then consider getting term life insurance. It’s an easy way to ensure that they have some money coming to them in case the primary breadwinner (be it you or your spouse) passes away. 

Disability Insurance

This is one to consider if you work in a job or situation that’s dangerous and could result in physical harm to your body or mental health issues in the future. Anything that could potentially prevent you from working in the future and earning money needs to be insured against here. 

Business Insurance

Running a business but don’t have insurance to protect your future? That’s a gamble you are better off avoiding. Put some business insurance in place so that if there’s any litigation that comes your way, your business can handle it. 

Critical Illness Insurance

If you know that there’s heart disease, stroke, cancer, or other illnesses in your family, then consider getting critical illness insurance to provide yourself and your family with some income in case you get extremely sick. Read the fine print carefully to know exactly how the illness has to present itself for you to receive the cash payout.

Estate Planning

If you have a lot of investments in place already, then you will want to have some kind of system in place so your children or benefactors can easily and without too much tax-loss inherit these investments after your death. This requires some estate planning while you are still alive, so that your children don’t spend half their lives fighting in courts for what is rightfully theirs.

Also, consider annual gifting as a method to give your assets to your benefactors. It’s a great way to avoid a big tax pay out when you die, and it means that your children or benefactors will end up with more money in their pockets. 

Refinancing

Do you have a home that is halfway paid off? Consider refinancing your home, particularly during periods when interest rates are low, and borrowing is cheap. This way, you can take advantage of the market no matter if the prices go up or down. 

You can also consider selling some of your properties so you can use that cash to pay off your primary home in full. This will free up some of your assets, and you could use the extra monthly income to go on a holiday or to take up a new hobby. 

Business Succession Planning

Too many business owners, busy with day-to-day affairs, forget that they need to have a plan for their business after they pass away. Who’s going to take care of your business once you are gone, and how will the pass off take place if you haven’t planned for it?

You don’t want your hard earned business asset being sold off to strangers or passed off to the government because you didn’t put certain measures in place. It might take a bit of work and a lot of forethought. But once you have this succession planning in place, you can relax knowing that your loved ones won’t have to scramble around after your demise.

All of these strategies for wealth might seem too complex or complicated for you to grasp. If that’s the case, consider taking courses from WealthAbility to grow your knowledge on the subject. 

Apply These Wealth Planning Strategies Step by Step

Don’t try to go from zero to 100 in one go. If you haven’t done any wealth planning till now, then you will need some time to set everything up.

Take one of the wealth planning strategies recommended above, apply it in full, and then move on to the next one. Also, check out related articles on our website to keep learning about this diverse subject matter.

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